Spanish solar power giant files for bankruptcy protection

Contractor Abeinsa Holdings, the US engineering arm of Spain’s Abengoa Corporation, has filed for Chapter 11 protection in the US Bankruptcy Court in the District of Delaware.

The move follows a filing for chapter 15 bankruptcy by its parent at the end of last week. Chapter 15 of the US code protects foreign companies against their US creditors.

Abengoa is a Spanish energy, telecoms, biotech and transportation corporation, which operates in the field of renewable technology and employs more than 20,000 people in about 80 countries. Abeinsa was ranked 54th largest contractor in the world in 2015 by Engineering News-Record.

Abengoa accounts for more than a quarter of the 5GW of solar energy produced around the world, including two groundbreaking plants in Arizona and California.

The New York Times notes that President Obama in 2010 made a speech welcoming the company to the US. He said: "It’s good news that we’ve attracted a company to our shores to build a plant and create jobs right here in America."

Documents filed with the court in Delaware said: "In face of a global slowdown, distress within the energy sectors and a heavily overleveraged balance sheet, Abengoa and its affiliates and subsidiaries throughout the world have been working toward a global restructuring of its financial obligations for months. The Chapter 11 cases are necessary to assist with the implementation of Abengoa’s global restructuring plan."

According to The Wall Street Journal, Abengoa has been struggling to repay €14.6bn ($16.6bn) in debt.

It has obtained protection from its creditors in Spain – avoiding what would have been the biggest bankruptcy in Spanish corporate history – and now has a standstill agreement with three-quarters of its creditors until October this year. The Chapter 15 deal protects it from possible legal action by the remaining 25%.

Each of Abeinsa Holding’s affiliated debtors is an indirect subsidiary of Abengoa.

The move follows reports of financial distress at another solar power giant, SunEdison, last week.

Story for GCR? Get in touch via email: [email protected]

Latest articles in Companies